This week, Calgary-based Trakopolis reported its fiscal 2017 recurring revenue which boasted a 42 per cent growth in MRR from December 2016 to December 2017, with higher prices for subscriptions for new products said to be the main growth driver for the tracking and supply management software company.

“Anticipated traction with new products contributed to substantial MRR growth in the last 2 quarters of fiscal 2017,” stated Brent Moore, CEO of Trakopolis in a press release. “Significantly higher subscription prices for new products are expected to increase average revenue per unit (ARPU) and does not include financed or leased hardware. This further illustrates that we are executing our growth plan while expanding our sales reach with world class partners like Honeywell, Telus, Microsoft and Bell. Enterprises from major industrial verticals are taking steps to digitize their operations for an increasing number of safety and productivity reasons and Trakopolis and our partners bring unequaled collaborative expertise.”

Garcea looks for continued growth in MRR and ARR from Trakopolis, noting that growth in the IIoT (Industrial Internet of Things) market is expected to reach $60 trillion by 2030, with over 50 billion assets, machines, equipment, turbines and so on connected to the Internet.

“The global gas detection market is poised to expand from US$3.4 billion in 2015 to US$5.6 billion by 2024, growing at a 5.6% CAGR,” says the analyst in a research update to clients on Tuesday. Garcea notes that TRAK recently announced a deal with “a large US-based oil and gas company for the sale of 1,500 units of Honeywell’s TRAK-powered ConneXt Lone Worker gas detection solution,” he says.

Garcea thinks Trakopolis will post total revenue and adjusted EBITDA in FYE 31-Dec 2017 of $9.6 million and -$2.9 million, respectively, and revenue and adjusted EBITDA in FYE 31-Dec 2018 of $11.4 million and -$2.2 million, respectively.

The analyst maintains his “Speculative Buy” rating as well as his one-year target price of $1.50, representing a projected total return of 103 per cent at time of publication.

About Jayson MacLean

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.